Feds begin paying next phase to Madoff scam victims -- $695M

The Justice Department has begun paying out a third installment of funds to victims defrauded by Bernard Madoff, seen here at New York City federal court in 2009. File Photo by Monika Graff/UPI | License Photo

Nov. 30 (UPI) -- The Justice Department said Thursday it's started giving $695 million to investors who lost money in the Ponzi scheme run by Bernard Madoff, believed to be the largest such scam in history.

The third phase of the distribution comes almost two weeks before the 10th anniversary of Madoff's arrest. Authorities believed the fraud was estimated at $65 billion.

The money will be sent to more than 27,000 victims worldwide, accounting for 56 percent of the money they lost, a Justice Department statement said. Prosecutors said when it's finished, more than $4 billion will have been returned.

"Bernie Madoff's scheme devastated retirement and pension funds, charitable organizations, and thousands of individual investors spread across 49 States, the District of Columbia, and 121 other countries," Assistant Attorney General Brian Benczkowski said Thursday.

"Victims who would not have seen a dime in other compensation programs will now recover more than half of their losses."

The first distribution from the Bernie Madoff Victim Fund was made last year, which sent $772 million to 24,000 victims. At the time, more than 65,000 investors in 136 countries had applied for reimbursement.

Madoff pleaded guilty in 2009 to 11 federal felonies and admitted he used his investment business to benefit himself and his family. He remains in federal prison on a 150-year sentence.

Brother Peter Madoff was sentenced three years later to 10 years in prison after he pleaded guilty to federal charges of fraud and conspiracy.

"We understand no amount of money could ever restore the damage done by Madoff as a result of his selfish behavior and unforgivable financial crimes," FBI Assistant Director William F. Sweeney Jr. said.